Petition for Writ of Certiorari — Gold Kist Inc. v. Hooper

/ySupreme Court, U.S.

(ty #7189

No, 0 8 §2 JUL 1 0 2000

QEEICE O§ IH5 CLERK

In The

Supreme Court Of The Anited States

GOLD KIST INC. AND TEAMSTERS and

CHAUFFEURS UNION, LOCAL 612,

Petitioners,

v.

JIMMY HOOPER, ROBERT MCELRATH,

EZRA SANFORD, FRANK TRAVIS, FRED NICHOLS,

TROY MARCHBANKS, STEVE TURNER,

and JIMMY UPTAIN,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

D. Christopher Lauderdale

(Counsel of Record)

Haynsworth Baldwin Johnson & Greaves LLC

P.O. Box 10888

Greenville, SC 29603

864.271.7410

Counsel for Petitioner Gold Kist Inc.

i

QUESTIONS PRESENTED

1. Whether a group of feed mill employees repre-

sented by a union may state a claim for breach of a collec-

tive bargaining agreement based solely on the existence of a

collectively bargained ancillary agreement that provides

potential additional compensation to a separate group of

truck drivers within the same bargaining unit.

2. Whether a group of feed mill employees may

state a claim for breach of the duty of fair representation

based solely on the union's negotiation of an agreement to

continue a longstanding incentive bonus for truck drivers

where, after good-faith bargaining, the union was unsuc-

cessful in its attempt to obtain, through negotiation, a simi-

lar incentive bonus for feed mill employees.

3. | Whether employees are required to exhaust their

contractual grievance and arbitration remedies before assert-

ing claims for breach of a collective bargaining agreement

upon which a hybrid Section 301/duty of fair representation

claim is based where such claims for breach of the collec-

tive bargaining agreement are based on a collectively bar-

gained ancillary agreement that provides potential additional

compensation to a separate group of employees within the

bargaining unit.

il

PARTIES TO THE PROCEEDING

The parties before this Court are those set forth in the

caption. '

' Gold Kist Inc., a Georgia corporation, is an agricultural

cooperative of 31,000 farmers. Subsidiaries of Gold Kist Inc.

include Agratech Seeds Inc.; Agratrade Financing, Inc.;

Agvestments, Inc.; Carolina Golden Products Company, Inc.;

Commerce Ventures, LLC; Cross Equipment Company, Inc.;

Dixico Pet Food, Inc.; GC Properties; GK/LOL, LLC; GK Pecans,

Inc.; GK Finance Corporation; GKX, Inc.; and Luker Inc. Gold

Kist owns a 33 percent stake in Golden Peanut Company through

its partnership with Archer Daniels Midland and Alimenta

Processing. Gold Kist owns a 25 percent stake in Young Pecan

Company. Gold Kist also owns a stake in Scott G. Williams LLC.

There are no parent companies or other non-wholly-owned

subsidiaries. :

ili

TABLE OF CONTENTS

EE on re ir rea et ae i

Ns oer ee oe il

II 55 oh cos oon k cmd bene keene ili

TSE BENT ar go a aera ee iv

Table of Authorities—Cases ...................0.. vi

Table of Authorities—Statutes .................... 1X

Table of Authorities—Other Oe ee Ore eae iX

ee at a aw bwccdaenual l

SUMOCIIICN OF FUTISGICHION . 0... ec ccc cc eeee ]

Relevant Statutory Provisions ..................... ]

I is oo ek seca vnc neces eceucs l

History of incentive programs at Jasper feed mill .. 2

1998 contract negotiations ................... 3

Proceedings in the district court ............... 4

The court of appeals proceedings .............. 7

Reasons for Granting Writ ....................200. 8

I. The Eleventh Circuit's Decision That

Respondents Have Alleged Facts Sufficient To

State A Claim For Breach Of Contract Is In

Conflict With The National Labor Relations Act

As Well As Decisions Of This Court And Of

CB eer ore rere 9

If. The Eleventh Circuit's Decision That Respon-

dents Have Alleged Facts Sufficient To Sustain

A Claim For Breach Of The Union's Duty Of

Fair Representation Is Contrary To Decisions Of

This Court And Other Courts Of Appeals ....... 20

iV

III. Respondents Have Failed To Fulfill The Proce-

dural Requirements Of A Hybrid Section 301/

Duty Of Fair Representation Case Because They

Failed To Exhaust Their Contractual Remedies .. 25

Pr ee rire eye Pep Pe re ye 30

Vv

TABLE OF AUTHORITIES

Cases:

Air Line Pilots Association, International v.

O'Neill, 499 U.S. 65 (1991) ......ccccccssccosssscceees 8, 20, 21

Appalachian Shale Products,

Bee PCR EWP LA OD siccianicisstscarsncicctdsecisnscrbens 17

Beriault v. Local 40, Super Cargoes & Checkers,

Fe DB BOW CO, LIF) ainneisccccesisicrrtiasicsenissicaens 26

Capitol-Husting Co. v. NLRB,

O79 F.2G TST CPR CW. BIRR) sicccscscccccccsssoseresasees 18-19

Cappa v. Wiseman, 659 F.2d 957 (9th Cir. 1981) ......... 19

Central States Southeast & Southwest

Areas Pension Fund v. Kraftco, Inc.,

FSD F 2G TORS GO Om. IGG) ass cccscscstcccccssescinccoceces 17

Confederated Independent Unions v. Rockwell-

Standard Co., 465 F.2d 1137 (3d Cir. 1972) ........... 17

Conran v. Great Atlantic & Pacific Tea Co.,

499 F. Supp. 727 (E.D. Pa. 1980) «00... 17-18

Del Costello v. IBT, 462 U.S. 151 (1983) ..... eee eeeeeeee 9

Edward S. Quirk Co., 330 N.L.R.B. No. 137,

2000-01 NLRB Dec. (CCH) 4 15424 (2000) ........... 12

Emporium Capwell Co. v. Western Addition :

Community Organization, 420 U.S. 50 (1975) .. 14-15

Ford Motor Co. v. Huffman,

FOS UB. Fae NPIS Cisecccttinicciatinn 8, 20-21, 21-22

Goodin v. Clinchfield Railroad Co.,

SAP Fe SF CR. FD iniciivicssacecstdiisditnasiocice 8, 23

Griffin v. Air Line Pilots Association,

International, 32 F.3d 1079 (7th Cir. 1994) .. 8, 22-23

Hamilton Foundry & Machine Co. v.

International Molders & Foundry

Workers Union, 193 F.2d 209 (6th Cir. 1951) ......... 19

eee

vi

Hayes v. Reynolds Metals Co.,

769 F.24 1520 (1 1th Cir. 1965) ....ccccccccsscscascocccsesers 27

Hines v. Anchor Motor Freight, Inc.,

BIA US. S54 CUGTE) cccccescooserssoscssssscoscosszense 8, 9, 28, 29

Houchens Market v. NLRB, |

37S F.26 ZUG (Gr Cir. 1967) ccccsecscncsesstscccsccecsnsssasene 18

Humphrey v. Moore, 375 U.S. 335 (1964) ......sseeeeeees 8, 20

: IBEW v. Foust, 442 U.S. 42 (1979) ......csssssecersreeeessreeeees 20

J.I. Case Co. v. NLRB, 321 U.S. 332 (1944) ....cccscesseees 15

Jimmy Dean Meat Co.,

B21 LRA ASST IGT) ccesisncarsesersesssessiisonsiascsiatioe 12

Local 174, IBT v. Lucas Flour Co.,

SOD U.S, FS. CIDE) seseccrssterercsscesesssnersiccsedinasemaastagets 30

Local 1316, IBEW v. Superior Contractors & Associates,

608 F. Supp. 1246 (N.D. Ga. 1985) .......ccceeeeeeeeeees 18

Matter of Columbian Enameling & Stamping Co.,

A LAIRD. BRE CEG) sccciviciicncusissicsenssimnioasnndetnalianteanan 13

Matter of Dallas Cartage Co.,

A PEL BRB: SE 1 CEI D scieciessntasntctesinsindsinnieces 13

Matter of International Filter Co.,

1 NLRB. Se Cee sictictinenen 13

Matter of J.I. Case Co., 71 N.L.R.B. No. 182 (1946) ..... 13

Matter of Jackson Daily News, Inc.,

SRE TA CI inti 13

Matter of Register Publishing Co.,

44 NLRB. BSAC) ccccicticccntninicieniinn 13

Matter of Uhlich & Co., 26 N.L.R.B. 679 (1940) ........... 13

Medo Photo Supply Corp. v. NLRB,

SEE US, Sie Ca iitiieeintic td insncinibinticlnticcans 27

Meyerson v. Contracting Plumbers Association,

606 F. Supp. 282 (S.D.N.Y. 1985) ..............cccccocccees 17

Vii

Moreau v. Local Union 247, International

Brotherhood of Firemen & Oilers,

ia Fi Th bt 2 | ee a

NLRB v. Electra-Food Machinery, Inc.,

GE Fe Foe Ce els BOD bic dsiteintcccccsnssdndondinininns 18

NLRB v. Haberman Construction Co.,

Oe Fe Be Ee ets HED. ealkcaciticiicetcbtisacincdacinnnte 19

NLRB v. Insurance Agents’ International Union,

CB Bg gt, Sees me mre eee meee 14

NLRB v. International Union of Elevator Constructors

Local No. 8, 465 F.2d 974 (9th Cir. 1972) ........ 17, 18

NLRB v. Jones & Laughlin Steel Corp., :

PE ee 0 Ee Satish ab ticiasdeidtednnisicsndsiceaaaacnhi 13-14

NLRB v. Seneca Environmental Products,

gt BEY | fo D. : f Rr ee Omnmeee 18

NLRB vy. Truckdrivers, Chauffeurs & Helpers,

Local Union No. 100,

Foe FE PO CE Gls EBON widasiancinitinisctinsncttaniitndii 18

Parker v. Connors Steel Co.,

855 F.2d 1510 (11th Cir. 1988) oe. 8,9, 21, 24

Rabouin v. NLRB, 195 F.2d 906 (2d Cir. 1952) ............. 19

Republic Steel Corp. v. Maddox,

Ee CP Ee GRE iinet citcicemcnningiinesinninn 27, 30

Samples v. Ryder Truck Lines, Inc.,

755 F.2d 881 (11th Cir. 1985) ................sccccseseee 27

Spellacy v. Airline Pilots Association-International,

156 F.3d 120 (2d Cir. 1998) ...22........0c00000 7-8, 22, 23

UPS v. Mitchell, 451 U.S. 56 (1981) ......ccccecsesceesreeeseeeees 9

United Health Care Services, Inc., 326 N.L.R.B.

No. 144, 163 L.R.R.M. (BNA) 1061 (1998) ........... 17

United Steelworkers v. American Manufacturing Co.,

Ey PE OD iain tisiin Wess nti eencnicsniniainanitain 29

Vaca v. Sipes, 386 U.S. 171 (1967) «0.00.0... 8, 9, 20, 28

Vill

Van Leeuwen v. United States Postal Service,

GES E26 TORS COC. POO) iasscevcinssnasisssissonncic 8, 23

Watson v. IBT, 399 F.2d 875 (Sth Cir. 1968) ............00000 18

Williams v. Pacific Maritime Association, 7

617 F.2d 1321 (Sth Cir. 1980) occ 8, 23

Statutes:

Be is CEEED tecincenssnnienitcsionnniindnassnncoomnsinashtiansinttiabs l

PRI SRE. cswinseicciacsadsansnbadssasdastiasmasdeannasenansenniitals 7

Be Ea OM Ries haiidcieninbnsecennsanicbenentanene passim

BP ee NOD enticsiccitnacincsecnassasssinincbictanammasioiiins 1,10

FF eS TE | siisshsancisnntassanntisarinaenarrntas 1,10, 12, 24

Ee Te WUE wicoudsiccinsinincannbicanidubindaseniaiccadeilasasiiaa 1,14

BF eC RMIED siieiciscsnts scenatnbainssniannsnanibeniadaniandas 1,29

Fe es FE * sa atbssnciindasecieineakiibacuanhencedanensonbaleidiioen passim

EE te risiseseistaionapseitickistidaslecinibsaannsimmaniadpiaaal 21

Other:

H.R. Rep. No. 245 (1947) on H.R. 3020,

Sr NE CIO ED siscisisctendisacscusnnicsdaeiaiisicinees 13-14

]

REFERENCE TO OFFICIAL AND UNOFFICIAL

REPORTS OF OPINIONS BELOW

The District Court for the Northern District of Alabama

granted Gold Kist Inc. and Teamsters Local 612 summary

judgment on January 21, 1999. (App. at 8a.) On F ebruary 7,

2000, the United States Court of Appeals for the Eleventh

Circuit issued its decision reversing summary judgment.

The decision of the Eleventh Circuit is not reported. (App.

at la-7a.) Petitioner's timely petition for rehearing was de-

nied on April 11. (App. at 42a.)

STATEMENT OF JURISDICTION

The judgment of the court of appeals sought to be re-

viewed was entered on February 7, 2000. A timely petition

for rehearing was filed on February 28, 2000. On April 11,

2000, the court of appeals denied the petition for rehearing.

This Court has jurisdiction to review the judgment of the

court of appeals pursuant to 28 U.S.C. § 1254(1) (1993).

RELEVANT STATUTORY PROVISIONS

The relevant statutory provisions are set forth in the

Appendix at 44a-Sla. These are 29 U.S.C. § 158(a)(5)

(1998), 29 U.S.C. § 158(d) (1998), 29 U.S.C. § 159(a)

(1998), 29 U.S.C. § 173(d) (1993), and 29 U.S.C. § 185

(1993).

STATEMENT OF THE CASE

Petitioner, Gold Kist Inc., produces and markets poultry

products at various facilities located throughout the United

2

States. Its operations include a feed mill in Jasper, Alabama,

where it manufactures chicken feed. This operation employs

laborers in the feed mill department and drivers in the truck-

ing department. (App. at 10a-1la.) Feed mill employees

unload the raw ingredients from railcars and supply trucks,

combine the ingredients for the manufacture of the feed, and

load the feed on Gold Kist feed-haul trucks so the drivers

can deliver it to chicken farms. All employees at the Jasper

feed mill operation, including feed mill employees and

drivers, are represented by Teamsters Local 612 ("Union").

(App. at 10a-12a.)

Employees of the feed mill have been represented by the

Union since Gold Kist purchased the facility in the early

1970s. Since that time, Gold Kist and the Union have nego-

tiated collective bargaining agreements approximately every

three years. (App. at 11a & 31a.) The current labor contract

is effective February 1, 1998, through January 31, 2001.

(App. at 1 la, 33a, & 102a.) Respondents in the present case

are 8 of the 17 feed mill employees. (App. at 1 1a.)

A. History of incentive programs at Jasper feed mill

The facts relevant to Respondents’ claims are essentially

undisputed. During contract negotiations in the mid 1970s,

Gold Kist and the Union orally agreed to an incentive pay

plan for the drivers based on mileage and tonnage to encour-

age the drivers to work more efficiently and haul more feed

in a shorter period of time. (App. at 13a.) Pursuant to the

agreement, drivers earn the hourly rate set forth in the col-

lective bargaining agreement or the incentive rate, which-

ever is higher. To date, the driver incentive plan is unwritten

except for the written formulas used to calculate incentive

3

pay and thus determine whether a driver receives the incen-

tive pay or the hourly rate. (App. at 13a.)

In the late 1970s, the Union proposed, and the parties

agreed upon, an incentive plan for the feed mill employees.

(App. at 13a.) This plan, like the incentive plan for the driv-

ers, was an oral agreement between Gold Kist and the Un-

ion. The plan proved to be unworkable, however, and the

feed mill employees were rarely able to earn incentive pay

under this plan. (App. at 13a.)

Consequently, the Union proposed in negotiations for

the 1980 contract that the feed mill employees receive addi-

tional pay of 10 cents an hour in place of the unsuccessful

incentive plan. (App. at 13a.) Gold Kist accepted this pro-

posal, and an agreement to that effect was ratified by the

membership and has been adopted in every collective bar-

gaining agreement since 1980. (App. at 13a.) The wage

schedule of the current agreement states that "[i]n addition

to rates set forth in the above wage schedule, an additional

ten cents (10¢) per hour will be paid to all feed mill employ-

ees in lieu of the incentive plan." (App. at 105a.) Signifi-

cantly, drivers do not receive this guaranteed hourly bonus.

The feed mill employees have continued to receive

10 cents an hour over the rate published in the wage sched-

ules attached to each of the 1980, 1983, 1986, 1989, 1992,

1995, and 1998 collective bargaining agreements. (App.

at 13a.) Throughout this same period of time, the drivers’

incentive plan continued.

B. 1998 contract negotiations

During negotiations for the 1998 agreement, the Union

proposed an incentive plan for feed mill employees, and the

Union's proposal was thoroughly discussed. (App. at 13a.)

4

Although the Union's incentive plan proposal was not

agreed upon, the Union was able to obtain a 30-cent hourly

increase in wages for the first year of the collective bargain-

ing agreement and additional increases in each year there-

after. (App. at 104a.) The feed mill employees, unlike the

trucking department employees, also specifically received a

guaranteed |0-cent-an-hour premium in lieu of an incentive

pay plan.

The Union conducted a ratification vote on the contract

among all employees. Thirty-one of the 32 members of the

unit, including all of the Respondents, were present. Re-

spondent Nichols, in his role as shop steward, presided over

the vote count and recommended acceptance of the contract

—without an incentive plan for feed mill employees. The

vote was 26 employees for the contract and 5 against. (App.

at 13a.) Therefore, it is uncontroverted that at least 11 of the

17 feed mill employees affirmatively voted for the proposed

contract. Even though several Respondents voted for the

contract on January 27, this suit was commenced on Febru-

ary 13, 1998.

C. Proceedings in the district court

Respondents commenced this action in the Northern

District of Alabama on February 13, 1998, as a "classic

hybrid" Section 301 (Labor-Management Relations Act)/

duty of fair representation action alleging that Gold Kist

breached various collective bargaining agreements and that

the Union breached its duty of fair representation to Re-

spondents and other similarly situated employees under

those collective bargaining agreements. (App. at 61a.) Con-

strued most favorably for Respondents, the Amended Com-

plaint sets forth only one alleged breach of the collective

5

bargaining agreement—that Gold Kist "breached" the wage

provisions of the agreement by paying the drivers amounts

of pay calculated via the negotiated incentive pay plan

rather than the hourly rates set forth in the agreement. Con-

sidered as a whole, the Amended Complaint may arguably

be read to allege that the Union breached its duty of fair

representation by negotiating incentive pay for the drivers

but not for the feed mill employees.

On May 8, 1998, in an opinion by District Judge Wil-

liam M. Acker, Jr., the court disposed of any and all‘claims

asserted by Respondents under collective bargaining agree-

ments prior to the 1998 agreement. (App. at 28a-29a.)

Respondents did not appeal Judge Acker's partial grant of

summary judgment to Gold Kist and the Union.

On January 21, 1999, District Judge Inge P. Johnson

issued her memorandum opinion granting Gold Kist and the

Union summary judgment. (App. at 8a-27a.) Judge John-

son's decision disposed of any and all claims alleging viola-

tions of the 1998 collective bargaining agreement. (App.

at 26a.) In this opinion, the district court first addressed

Respondents’ claims against Gold Kist for breach of the

1998 collective bargaining agreement based on the payment

of incentive pay for drivers but not for the feed mill employ-

ees (App. at 18a), stating:

This court cannot find any logic in this argument.

Assuming this court ordered the defendants to void

their verbal contract and pay the truck drivers solely

the hourly wage specified in the contract, the plain-

tiffs here would not earn any more money.

.... No where [sic] can this court find justifica-

tion for the plaintiffs’ proposition that paying an em-

6

ployee more than a required amount violates a con-

tract, nor do plaintiffs cite any legal support for this

novel contract interpretation. This court also cannot

find any basis for the plaintiffs [sic] proposition that

the verbal contract between Gold Kist and the truck

drivers is contrary to the collective bargaining agree-

ment.

(App. at 18a.) In addition, the district court held that Re-

spondents were not damaged by any "alleged breach." (App.

at 19a.) The court thoroughly analyzed the three sections of

the collective bargaining agreement that Respondents al-

leged were breached and found that none of these provisions

had been violated by Gold Kist. (App. at 19a-20a.) The

court further found that the agreement with regard to incen-

tive pay for drivers did not violate the collective bargaining

agreement. (App. at 20a-21a.) Finally, the court recognized

that Respondents "apparently want this court to order the

defendants to renegotiate the contract that at least some of

these plaintiffs voted to approve to obtain what they could

not obtain through the collective bargaining process." (App.

at 21a.)

The district court also found that the Union did not

breach its duty of fair representation. The court character-

ized Respondents’ claims as a "mere bald allegation that the

Union somehow acted in bad faith because no incentive pay

agreement was reached." (App. at 22a-23a.) The court fur-

ther recognized the impossibility of Respondents’ claims

that the Union had breached its duty of fair representation,

noting that Respondents alleged that on the one hand, the

Union had knowledge of the truck driver incentive pay, and

on the other hand, Gold Kist breached the contract because

the Union would have negotiated for a greater rate of pay

7

for all employees if the Union had known of the driver

incentive pay. (App. at 2la-22a.) The district court held

alternatively that Respondents failed to exhaust their admin-

istrative remedies prior to commencing this action in the

district court. (App. at 24a-26a.)

D. The court of appeals proceedings

On February 17, 1999, Respondents filed a notice of .

appeal with the United States Court of Appeals for the

Eleventh Circuit. The court of appeals acquired jurisdiction

pursuant to 28 U.S.C. § 1291 (1993).

On February 7, 2000, a majority of the court of appeals

panel reversed the district court's grant of summary judg-

ment, holding that a reasonable jury could find that Gold

Kist breached the collective bargaining agreement and the

Union violated its "fiduciary" duty. (App. at 4a.) More spe-

cifically, the majority concluded that a reasonable jury could

find a breach of the collective bargaining agreement because

Article 1, Section 5, prohibits "individual agreements be-

tween the Company [Gold Kist] and an employee in conflict

with this agreement” and because Article 27, Section 11,

requires that any modification be in writing. (App. at Sa.)

Judge Black dissented. (App. at 7a.) She concluded that

"{e]ven assuming Gold Kist did breach the collective bar-

gaining agreement, I do not believe a reasonable jury could

conclude that the Union violated its duty of fair representa-

tion." (App. at 7a.) Judge Black found that "[a]lthough the

‘side agreement’ did favor the truck drivers, Appellant has

not alleged any facts to show that this was the result of a

breach of the duty of fair representation." (App. at 7a (citing

Spellacy v. Airline Pilots Ass'n-Int'l, 156 F.3d 120, 129 (2d

8

Cir. 1998)). Finally, Judge Black noted that Respondents’

"proper recourse is to be found in the collective bargaining

process, not the courts.” (App. at 7a.)

Petitioners now file this petition for certiorari.

REASONS FOR GRANTING WRIT

The Court should grant the writ- because:

1. This case presents important questions of statutory

interpretation arising under the National Labor Relations

Act ("NLRA"), 29 U.S.C. §§ 151 to 169.

2. The Eleventh Circuit ruling directly contradicts nu-

merous standing decisions of this Court. See Air Line Pilots

Ass'n, Int'l v. O'Neill, 499 U.S. 65, 67 (1991); Hines v. An-

chor Motor Freight, Inc., 424 U.S. 554 (1976); Vaca v.

Sipes, 386 U.S. 171, 177 (1967); Humphrey v. Moore, 375

U.S. 335, 342 (1964); Ford Motor Co. v. Huffman, 345 U.S.

330, 338 (1953).

3. This case presents a conflict between the Eleventh

Circuit and every other court of appeals that has addressed »

the issues presented. See Spellacy v. Airline Pilots Ass'n-

Int'l, 156 F.3d 120, 127 (2d Cir. 1998); Griffin v. Air Line

Pilots Ass'n, Int'l, 32 F.3d 1079, 1083-84 (7th Cir. 1994);

Moreau v. Local Union 247, Int'l Bhd. of Firemen & Oilers,

851 F.2d 516, 519-20 (Ist Cir. 1988); Parker v. Connors

Steel Co., 855 F.2d 1510, 1519 (11th Cir. 1988); Van

Leeuwen v. United States Postal Serv., 628 F.2d 1093,

1096-97 (8th Cir. 1980); Williams v. Pacific Maritime Ass'n,

617 F.2d 1321,-1330 (9th Cir. 1980); Goodin v. Clinchfield

R.R. Co., 229 F.2d 578, 579 (6th Cir. 1956).

The Eleventh Circuit's Decision That Respon-

dents Have Alleged Facts Sufficient To State A

Claim For Breach Of Contract Is In Conflict

With The National Labor Relations Act As Well

As Decisions Of This Court And Of Other

Courts Of Appeals.

A hybrid Section 301/duty of fair representation lawsuit

involves interdependent claims that (1) a company breached

the collective bargaining agreement and (2) a union violated

its duty of fair representation. As Judge Black recognized in

her dissent, a plaintiff must prove both a breach of the col-

lective bargaining agreement by the company and a breach

of the duty of fair representation by the union in order to

prevail in a hybrid Section 301/duty of fair representation

action. (See App. at 7a (citing Parker v. Connors Steel Co.,

855 F.2d 1510, 1519 (11th Cir. 1988), and Hines v. Anchor

Motor Freight, Inc., 424 U.S. 554, 570-71 (1976)); see also

UPS v. Mitchell, 451 U.S. 56, 67 (1981) (Stewart, J., con-

curring) ("plaintiff must prevail upon his unfair representa-

tion claim before he may even litigate the merits of his

§ 301 claim against the employer").

Whether a union has breached its duty of fair representa-

tion is frequently the pivotal question in a Section 301 ac-

tion alleging that the employer breached a collective bar-

gaining agreement. See, e.g., Del Costello v. IBT, 462 US.

151, 164-65 (1983); Vaca v. Sipes, 386 U.S. 171, 183

(1967) ("question of whether a union has breached its duty

of fair representation will in many cases be a critical issue in

a suit under L.M.R.A. § 301 charging an employer with a

breach of contract"). Of course, a viable claim for breach of

10

the extant collective bargaining agreement is equally essen-

tial to a hybrid Section 301/duty of fair representation claim.

As the district court recognized in this case, "[U]nless Gold

Kist breached the contract by paying the truck drivers more

than the stated rate, there can be no breach of the duty. of

fair representation [by the Union]." (App. at 17a.) |

Three absolute and irrefutable truths demonstrate the

logical impossibility of Respondents’ claims that Gold Kist

has breached the collective bargaining agreement under any

accepted standard for maintaining an action under Sec-

tion 301:

1. It is undisputed, as is clear from the collective bar-

gaining agreement, that Gold Kist has not agreed to

pay mill workers any incentive bonus or pay other

than that set forth in the collective bargaining agree-

ment.

2. For Gold Kist to provide any pay to Respondents

other than the pay specifically negotiated with the

Union would violate the NLRA. 29 U.S.C.

§ 158(a)(5).

3. No court, arbitrator, or administrative agency may

compel Gold Kist to agree to any proposal or make

any concession in collective bargaining. 29 U.S.C.

§ 158(d).

Respondents have alleged no facts sufficient to sustain

an. action for breach of a collective bargaining agreement.

Rather, their claim that Gold Kist violated the collective

bargaining agreement is plainly an attempt to obtain through

litigation what they could not obtain through the collective

bargaining process. Respondents simply make the incredible

claim that Gold Kist pays truck drivers more than the rate

stated in the 1998 contract and that as a result, Respondents

have somehow lost income because drivers make more

RE rman ne

1]

money than the contract's wage schedule enumerates. (App.

at 60a-61a.) The implausibility of this claim was plainly

evident to the district court: "This court cannot find any

logic in this argument. Assuming this court ordered the

defendants to void their verbal contract and pay the truck

drivers solely the hourly wage specified in the contract, the

plaintiffs here would not earn any more money." (App.

at 18a.) Likewise, as the district court stated, Respondents

cannot justify or cite any authority to support their "novel

contract interpretation." (App. at 18a.)

There is no dispute that Respondents have received the

wages and other benefits established in the agreement. They

do not allege otherwise. Respondents therefore cannot es-

tablish any breach of the collective bargaining agreement

and have suffered no damages. Respondents, moreover,

ratified this contract without an incentive plan for feed mill

employees. The current contract, like the predecessor con-

tracts since 1980, clearly provides that "an additional ten

cents (10¢) per hour will be paid to all feed mill employees

in lieu of the incentive plan." (App. at 105a (emphasis

added).) As the contract makes clear, and as the district

court found based upon undisputed facts, an incentive plan

for the drivers has been established for many years through

successive collective bargaining agreements. (App. at 13a &

105a.) The district court correctly observed that Respon-

dents "apparently want this court to order the defendants to

renegotiate the contract that at least some of these plaintiffs

voted to approve to obtain what they could not obtain

through the collective bargaining process." (App. at 21a.)

The evidence clearly establishes that Respondents re-

ceive pay in accordance with the wage schedule for the

current contract, which includes a 10-cent-an-hour premium

in lieu of an incentive plan. It is equally true that Respon-

12

dents’ subjective desire to make more money does not

equate to a cognizable breach of contract claim. In fact, for

Gold Kist to offer Respondents any incentive bonus or other

pay not agreed to by the Union as Respondents’ statutory

exclusive bargaining representative would violate the

NLRA. Edward S. Quirk Co., 330 N.L.R.B. No. 137, 2000-01

NLRB Dec. (CCH) 4 15424 (2000) (holding that employer

unlawfully implemented an incentive plan for union-repre-

sented employees without first bargaining to agreement with

the union); Jimmy Dean Meat Co., 227 N.L.R.B. 1527

(1977) (same).

Section 8(d) of the NLRA further demonstrates the im-

plausibility of Respondents’ claims:

[T]o bargain collectively is the performance of the

mutual obligation of the employer and the represen-

tative of the employees to meet at reasonable times

and confer in good faith with respect to wages,

hours, and other terms and conditions of employ-

ment, or the negotiation of an agreement, or any

question arising thereunder, and the execution of a

written contract incorporating any agreement

reached if requested by either party, but such obliga-

tion does not compel either party to agree to a pro-

posal or require the making of a concession... .

29 U.S.C. § 158(d) (emphasis added). The legislative his-

tory of Section 8(d) demonstrates that this provision was

enacted in direct response to decisions of the National Labor

Relations Board ("NLRB" or "Board") finding that employ-

ers had violated the NLRA by refusing to agree to specific

collective bargaining proposals:

\

(1

U)

13

[T]he present Board has gone very far, in the guise

of determining whether or not employers had bar-

gained in good faith, in setting itself up as the judge

of what concessions an employer must make and of

- the proposals and counterproposals that he may or

may not make. The Board has gone so far as to hold

an employer's refusal to compel workers to become

and remain members of unions, under so-called

"closed shop" arrangements, to be evidence that the

employers had not bargained "in good faith". (See

Matter of International Filter Co., 1 N.L.R.B. 489

(1936); Matter of Columbian Enameling and Stamp-

ing Co., 1 N.L.R.B. 181 (1936); Matter of Jackson

Daily News, 9 N.L.R.B. 120 (1938); Matter of

Uhlich and Co., 26 N.L.R.B. 679 (1940); Matter of

J. I. Case Co., 71 N.L.R.B. No. 182 (1946).)

The Board has held it "unfair" for an employer to

insist that he and the union settle their differences by

collective bargaining, instead of submitting them to

some form of "collective litigation" like arbitration

(Matter of Dallas Cartage Co., 14 N.L.R.B. 411

(1939); Matter of Register Publishing Co., 44

N.L.R.B. 834 (1942)).

H.R. Rep. No. 245, at 19(1947) on H.R. 3020, 80th Cong.

(1947). Enacting Section 8(d), Congress made clear that it -

was ratifying the principles of NLRB v. Jones & Laughlin

Steel Corp, 301 U.S. 1, 45 (1937), in which the Court ob-

served:

The Act does not compel agreements between

employers and employees. It does not compel any

14

agreement whatever. It does not prevent an employer

"from refusing to make a collective contract and ,

hiring individuals on whatever terms" the employer

"may by unilateral action determine... ." The theory

of the Act is that free opportunity for negotiation

with accredited representatives of employees is

likely to promote industrial peace and may bring

about the adjustments and agreements which the Act

in itself does not attempt to compel... .

(Footnote omitted); see H.R. Rep. No. 245 on H.R. 3020.

The Court further observed in NLRB v. Insurance Agents'

International Union, 361 U.S. 477, 488 (1960), that Con-

gress "intended that the parties should have wide latitude in

their negotiations, unrestricted by any governmental power

to regulate the substantive solution of their differences."

(Emphasis added.) Section 8(d) of the NLRA was specifi-

cally intended to encourage collective bargaining, not the

"collective /itigation" represented by this action. See H.R.

Rep. No. 245 on H.R. 3020. In this case, there is no conten-

tion that Gold Kist did not bargain fully and in good faith in

negotiating the 1998 agreement.

In light of the clear limitation of Section 8(d) on the

authority of the NLRB and the courts, there is no conceiv-

able remedy for the claim asserted by Respondents. In short,

even if by some artifice of reason Respondents could estab-

lish a jury issue with respect to breach, the NLRA denies a

court the authority to order Gold Kist to establish an incen-

tive plan for feed mill employees.

The principles of majority rule and a union's exclusive

representation of employees are fundamental tenets of fed-

eral labor law. 29 U.S.C. § 159(a) (1998); Emporium Cap-

well Co. v. Western Addition Community Org., 420 U.S. 50,

15

62-65 (1975); Samples v. Ryder Truck Lines, Inc., 755 F.2d

881, 885-86 (11th Cir. 1985) (indicating that a basic prem-

ise of unionism is the sacrifice of individual rights for col-

lective rights). Nevertheless, the court of appeals majority

relied on Article 1, paragraph 5, of the current collective

bargaining agreement as support for a conclusion that the

incentive pay plan for drivers in some way breached that

agreement. (App. at 5a.) Paragraph 5 states: "There shall be

no individual agreements between the Company and an

employee in conflict with this Agreement." (App. at 68a.)

The majority's reliance on this provision demonstrates a

clear misunderstanding of basic labor law.

The clause on which the court of appeals relied is a por-

tion of the recognition article, which is a standard provision

of a collective bargaining agreement. Paragraph 5 is simply

a contractual provision reflecting the mandate of the NLRA

that individual contracts with employees in a bargaining unit

are prohibited because individual contracts conflict with the

collective rights established by the NLRA, 29 U.S.C. §§ 151

to 169. JI. Case Co. v. NLRB, 321 U.S. 332, 337-38 (1944).

The principle of exclusive representation prohibits individ-

ual contracts with employees and prohibits a company from

bargaining with employees individually. Emporium Cap-

well, 420 U.S. at 62-65. Under the NLRA, once it is recog-

nized by the employer or certified by the NLRB, a union is

the exclusive bargaining representative of the employees.

Article 1, paragraph 5, does not prohibit an agreement be-

tween the Union and Gold Kist affecting a group of employ-

ees, such as the drivers; it prohibits agreements between

Gold Kist and individual employees. The agreement be-

tween the Union and Gold Kist for an incentive plan for

drivers is therefore not a violation of the collective bargain-

ing agreement. This lawsuit, in contrast, is an effort by Re-

16

spondents to undermine the exclusivity principle and the

agreements reached between Gold Kist and the Union in the

legally mandated collective bargaining process.

The Eleventh Circuit's opinion is in direct conflict with

the decision of the First Circuit in Moreau v. Local

Union 247, International Brotherhood of Firemen & Oilers,

851 F.2d 516 (1st Cir. 1988). There, a local union negoti-

ated a "side agreement" to a ratified collective bargaining

agreement that restricted certain employee transfers within

the bargaining unit. Jd. at 517. The side agreement was

agreed to by the bargaining representative and the company

and set forth in a written, but unsigned, memorandum pre-

pared by the company. /d. at 517-18. The side agreement

directly contradicted a provision of the collective bargaining

agreement requiring that job vacancies be filled according to

seniority. Jd. at 517. An employee who was denied a re-

quested transfer because of the terms of the side agreement

brought a Section 301/duty of fair representation claim

against the employer for breach of the agreement and

against the union for declining to process his grievance. /d.

at 518.

The First Circuit affirmed the district court's grant of

summary judgment to the employer and the union. The

court first noted that "the local unions could void old side

agreements and negotiate new side agreements regarding

matters of local concern on an as needed basis." /d. at 519.

The court found that "the side agreement validly became a

part of the collective bargaining agreement, and the Com-

pany committed no breach in denying . . . the transfer." Jd.

The court further found that because the union had apparent

authority to negotiate the side agreement, the side agreement

was valid and binding even in the absence of membership

ratification. /d. at 520. The court rejected an argument that

17

the local union lacked authority to bind the international

union to a side agreement under the terms of the union con-

stitution. Jd. Consequently, the court found that the union

did not breach its duty of fair representation in refusing to

pursue the affected employee's grievance. /d.

In the present case, there is similarly no basis for con-

cluding that the Union lacked authority to negotiate a bind-

ing side agreement supplementing, rather than contradicting,

the terms of the 1998 collective bargaining agreement. This

is particularly true since the supplemental agreement for

drivers’ incentive pay was merely a continuation of a long-

standing practice to which the Union and the Company had

agreed for more than 20 years. Central States Southeast &

Southwest Areas Pension Fund v. Krafico, Inc., 799 F.2d

1098, 1113 (6th Cir. 1986) (holding that ratification of a

side agreement was unnecessary because of general practice

of negotiating side agreements without ratification); NLRB

v. International Union of Elevator Constructors Local

No. 8, 465 F.2d 974, 975 n.1 (9th Cir. 1972) (holding that

contract was valid without membership ratification when

there was an "established history of entering into bargaining

agreements without such ratification"). Federal labor law

imposes no requirement that agreements negotiated by a

statutory bargaining representative be ratified or otherwise

approved by membership to be valid. See, e.g., Appalachian

Shale Prods., 121 N.L.R.B. 1160 (1958) (holding that even

though collective bargaining agreement was not ratified, it

operated as a bar to a decertification petition filed by em-

ployees); United Health Care Servs., Inc., 326 N.L.R.B.

No. 144, 163 L.R.R.M. (BNA) 1061 (1998) (same); see also

Confederated Indep. Unions v. Rockwell-Standard Co., 465

F.2d 1137, 1140 (3d Cir. 1972); Meyerson v. Contracting

Plumbers Ass'n, 606 F. Supp. 282 (S.D.N.Y. 1985); Conran

v. Great Atl. & Pac. Tea Co., 499 F. Supp. 727, 730 (E.D.

Pa. 1980). In fact, it is an unfair labor practice under the

NLRA for a union or an employer to insist upon ratification

once the parties have reached an otherwise valid collective

bargaining agreement. NLRB v. Seneca Envil. Prods., 646

F.2d 1170 (6th Cir. 1981); NLRB v. Electra-Food Mach.,

Inc., 621 F.2d 956, 958 (9th Cir. 1980); NLRB v. Truck-

drivers, Chauffeurs & Helpers, Local Union No. 100, 532

F.2d 569 (6th Cir. 1976); Elevator Constructors Local 8,

465 F.2d at 974; Houchens Mkt. v. NLRB, 375 F.2d 208 (6th

Cir. 1967). Rather, as the statutory bargaining representa-

tive, the Union has full authority under Section 9 of the

NLRA to negotiate:a binding collective bargaining agree-

ment and any side agreement or modification to a collective

bargaining agreement, with or without membership ap-

proval.

The court of appeals found that the negotiation of a

verbal agreement with the Union regarding an incentive

plan for drivers could support Respondents’ claim for breach

of the 1998 agreement. This finding ignores basic labor law.

The law is clear that a union and an employer may enter into

an agreement that "modiflies], supplement[s], or amend[s]

the collective bargaining contract." Watson v. IBT, 399 F.2d

875, 879 (Sth Cir. 1968) (citations omitted); see also Lo-

cal 1316, IBEW v. Superior Contractors & Assocs., 608

F. Supp. 1246, 1250 (N.D. Ga. 1985) (citing Watson with

approval). This flexibility between a union and an employer

reflects a "mutual interdependence” of the parties in "filling

in the details" of the collective bargaining agreement. See

Watson, 399 F.2d at 879. Moreover, since the inception of

the NLRA, the NLRB and the courts have recognized and

enforced both oral and written collective bargaining agree-

ments. Capitol-Husting Co. v. NLRB, 671 F.2d 237, 243

19

(7th Cir. 1982); Cappa v. Wiseman, 659 F.2d 957, 960 (9th

Cir. 1981); NLRB v. Haberman Constr. Co., 641 F.2d 351,

355-56 (Sth Cir. 1981); Rabouin v. NLRB, 195 F.2d 906,

910 (2d Cir. 1952); Hamilton Foundry & Mach. Co. v. In-

ternational Molders & Foundry Workers Union, 193 F.2d

209, 214 (6th Cir. 1951).

It is undisputed that Gold Kist and the Union negotiated

and entered into an agreement for a driver incentive plan. It

is also undisputed that this incentive plan had been in place

for more than 20 years prior to 1998. Likewise, construing

the facts in Respondents’ favor, Gold Kist and the Union

entered into this side agreement to continue the driver in-

centive plan after the 1998 contract was signed. Side agree-

ments between Gold Kist and Respondents’ exclusive bar-

gaining representative are not prohibited by the collective

bargaining agreement. (App. at 68a.) In fact, the stated "pur-

pose" of the contract is to provide flexibility to Gold Kist

and the Union in "increas[ing] the effectiveness of the work-

ing and economic relationships" between the parties. (App.

at 68a.) Most important, the contract clearly and unequivo-

cally states that feed mill employees, including Respon-

dents, do not receive incentive pay, but instead receive an

hourly premium. (App. at 105a.)

It is undisputed that Respondents have received all com-

pensation to which they are entitled under the collective

bargaining agreement. It is further clear under the NLRA

that Gold Kist could not be compelled to institute an incen-

tive plan or any other form of compensation. Gold Kist did

not, therefore, breach the contract by entering into a supple-

mental agreement with the Union regarding a driver incen-

tive program.

20

The Eleventh Circuit's Decision That Respon-

dents Have Alleged Facts Sufficient To Sustain A

Claim For Breach Of The Union's Duty Of Fair

Representation Is Contrary To Decisions Of

This Court And Other Courts Of Appeals.

The Union's failure to obtain an incentive plan for feed

mill employees while entering into an agreement with Gold

Kist that drivers may be paid the greater of amounts earned

under the incentive plan or the hourly wage schedule con-

tained in the contract did not violate the Union's duty of fair

representation to the feed mill employees.

It is a well-established principle of labor law that a union

has a duty to fairly represent all the employees subject to a

collective bargaining agreement. See, e.g., Air Line Pilots

Ass'n, Int'l v. O'Neill, 499 U.S. 65 (1991). Likewise, the

union's duty of fair representation extends to both negotia-

tion of collective bargaining agreements and the enforce-

ment and administration of collective bargaining agree-

ments. See IBEW v. Foust, 442 U.S. 42 (1979). A union's

duty of fair representation requires it "to serve the interests

of all members without hostility or discrimination toward

any, to exercise its discretion with complete good faith and

honesty, and to avoid arbitrary conduct." Vaca v. Sipes, 386

U.S. 171, 177 (1967) (citing Humphrey v. Moore, 375 U.S.

335, 342 (1964)). However, a union's actions are arbitrary

and a breach of its fair representation duty "only if, in light

of the factual and legal landscape at the time of the union's

actions, the union's behavior is so far outside of a 'wide

range of reasonableness’ as to be irrational." Air Line Pilots,

499 U.S. at 67 (quoting Ford Motor Co. v. Huffman, 345

21

U.S. 330, 338 (1953)). Therefore, a union is vested with

considerable discretion in fulfilling its statutory obligation

to fairly represent employees in a bargaining unit.

A court's role in examining a union's performance of its

duty of representation is "highly deferential, recognizing the

wide latitude that negotiators need for the effective perfor-

mance of their bargaining responsibilities." Air Line Pilots,

499 U.S. at 78. In fact, the union is vested with such a "wide

range of reasonableness" that courts have held that mere

negligence by a union does not amount to a breach of the

union's duty of fair representation. Parker v. Connors Steel

Co., 855 F.2d 1510, 1519 (11th Cir. 1988).

The Court's decision in Huffman, 345 U.S. 330, conclu-

sively demonstrates that the allegations found in the

Amended Complaint fail to establish a claim for breach of

the duty of fair representation by the Union in negotiating

the driver incentive plan. In Huffman, the union and em-

ployer agreed to afford seniority credit for both pre- and

postemployment military service. The Selective Training

and Service Act of 1940, 50 U.S.C. § 308, required seniority

credit only for postemployment military service. As a result

of the agreement to credit preemployment military service

for seniority purposes, employees with credit for post-

employment service suffered a reduction in seniority as

compared to other employees. /d. at 331-32. The Court

sustained summary judgment for the union and the em-

ployer, finding no violation of the union's duty of fair repre-

sentation. The Court observed:

Inevitably differences arise in the manner and degree

to which the terms of any negotiated agreement af-

fect individual employees and classes of employees.

The mere existence of such differences does not

22

make them invalid. The complete satisfaction of all

who are represented is hardly to be expected. A wide

range of reasonableness must be allowed a statutory

bargaining representative in serving the unit it repre-

sents, subject always to complete good faith and

honesty of purpose in the exercise of its discretion. -

Compromises on a temporary basis, with a view

to long range advantages, are natural incidents of

negotiation. Differences in wages, hours and condi-

tions of employment reflect countless variables. . . .

Variations acceptable in the discretion of bargaining

representatives, however, may well include differ-

ences based upon such matters as the . . . nature of

the work [and] the time at which it is done... .

Huffman, 345 U.S. at 338-39. The Eleventh Circuit's deci-

sion in the instant case substantially departs from the estab-

lished standards for evaluating a union's fulfillment of its

duty to represent employees fairly.

The Eleventh Circuit majority opinion in this case is also

in direct conflict with a recent decision by the Second Cir-

cuit. In Spellacy v. Airline Pilots Association-International,

156 F.3d 120, 127 (2d Cir. 1998), the court held that a un-

ion's position that a contract's seniority provision did not

apply to the transfer of pilots from a financially moribund

airline to a second airline in a partial-asset purchase was not

so unreasonable as to constitute a breach of the duty of fair

representation. Likewise, the Spellacy court recognized that

"[a] union's reasoned decision to support the interests of one

group of employees over the competing interests of another

group does not constitute arbitrary conduct." /d. at 129 (cita-

tions omitted); see also Griffin v. Air Line Pilots Ass'n, Int'l,

23

32 F.3d 1079 (7th Cir. 1994); Van Leeuwen v. United States

Postal Serv., 628 F.2d 1093, 1096-97 (8th Cir. 1980); Wil-

liams v. Pacific Maritime Ass'n, 617 F.2d 1321, 1330 (Sth

Cir. 1980); Goodin v. Clinchfield R.R. Co., 229 F.2d 578,

579 (6th Cir. 1956).

Like the union in Spellacy, the Union here did not inter-

pret the current contract to preclude the drivers from receiv-

ing incentive pay. Moreover, nothing in the contract prohib-

its a group of employees from making more than the pre-

scribed minimum hourly rate set forth in the contract. Be-

cause the drivers and feed mill employees perform different

functions and perform these functions in entirely different

circumstances, it was within the realm of the Union's rea-

soned decision-making to continue to allow Gold Kist to

pay drivers the greater of the amount earned under incentive

pay or the hourly wage rates contained in the contract. The

Union's well-reasoned decision that the contract's wage

schedule constitutes a minimum wage and that Gold Kist

could pay the drivers on an incentive basis in excess of the

schedule does not constitute a breach of the duty of fair

representation. There is simply no evidence that the Union

breached its duty of fair representation to the feed mill em-

ployees. Given the long history of the compensation scheme

for the Jasper Feed Mill, any contention that the Union's

negotiation of such a compensation scheme is arbitrary,

discriminatory, or in bad faith is untenable and clearly fails

to meet the standard established by the Court for stating a

claim for breach of the Union's duty of fair representation.

The Union properly discharged its duty of fair represen-

tation to the feed mill employees. The facts are uncontro-

verted that in bargaining sessions for the 1998 contract, the

Union and Gold Kist negotiated over the Union's proposal

for the establishment of a feed mill employee incentive plan.

24

See Parker, 855 F.2d at 1520 n.7 (company's duty to bar-

gain in good faith does not require that it agree to unaccept-

able proposals). Although the Union was unsuccessful in

obtaining an incentive plan for the feed mill employees,

those employees did receive a wage increase for each year

of the 1998 contract.

As discussed above, Section 8(d) of the NLRA makes

clear that in collective bargaining negotiations, no party

may be compelled to agree to a proposal or make a conces-

sion in bargaining. 29 U.S.C. § 158(d). In light of this re-

striction on the authority of courts, arbitrators, and the

NLRB, it cannot be seriously contended that the Union

breached its duty of fair representation by failing to obtain

Gold Kist's agreement to a new incentive plan for the feed

mill employees. This is particularly true where the Union

proposed such a plan and discussed the proposal at length

during negotiations. Essentially, Respondents allege that the

Union should be liable for its failure to exercise authority

that the NLRA specifically denies to the courts and the

NLRB. Had the Union arbitrarily refused to seek through

negotiation an incentive plan for feed mill employees, Re-

spondents' claims would have somewhat more force. That

the Union actually proposed and attempted to secure Gold

Kist's agreement to incentive pay for feed mill employees

demonstrates the absence of any arbitrariness in its repre-

sentation of Respondents. Additionally, the Union achieved

for feed mill employees, through negotiation, an additional

10 cents an hour in lieu of incentive pay.

Under the reasoning of the court of appeals majority, in

order to state a claim for breach of the Union's duty of fair

representation, a litigant need be required to show only that

the Union negotiated an agreement that favors one group of

represented employees more than another. Inasmuch as most

25

collective bargaining agreements provide for different pay

rates for the various employee classifications covered, virtu-

ally every union, under the ruling of the Eleventh Circuit,

will be subject to litigation and claims for breach of the duty

of fair representation for virtually any agreement it has

negotiated. This absurd result illustrates the importance of

the questions presented by this writ and the need to address

these questions at the summary judgment stage of the case. _

Respondents Have Failed To Fulfill The Proce-

dural Requirements Of A Hybrid Section 301/

Duty Of Fair Representation Case Because They

Failed To Exhaust Their Contractual Remedies.’

The Amended Complaint that initiated this action sets

forth one alleged breach of the collective bargaining agree-

ment—that Gold Kist, by agreeing to a driver incentive

plan, paid drivers more than the contractual wage rate.

(App. at 60a-61a.) The Eleventh Circuit additionally found

that a jury could conclude that the agreement had been

breached because Gold Kist and the Union agreed to an oral

side agreement for incentive pay whereas the agreement

provides that modifications must be made in writing, and

because the agreement prohibits "individual agreements"

' As discussed in Section I above, Respondents have failed as a

matter of law to allege facts sufficient to sustain a claim for

breach of the collective bargaining agreement. Even if

Respondents could maintain an action for breach based on the

facts alleged, their failure to exhaust their contractual remedies

would bar this action.

26

between Gold Kist and "an employee." (App. at 5a.) The

Amended Complaint may also be arguably read to allege a

claim that the Union, in negotiating a side agreement that

favored drivers with an incentive plan while not obtaining

such an incentive plan for feed mill employees, violated its

duty of fair representation.

Any claim based on the Union's alleged failure to fulfill

its duty of fair representation in negotiating such a side

agreement, however, in no way implicates Gold Kist. In-

deed, in negotiating the collective bargaining agreement,

Gold Kist was required only to bargain in good faith and

was entitled to exercise its right under the NLRA to negoti-

ate a contract with the most favorable possible economic

terms for the Company. In negotiating the contract, Gold

Kist owed no duty to Respondents. The only duties owed to

Respondents by Gold Kist are those contractual duties as-

sumed by Gold Kist in the collective bargaining agreement.

While an alleged breach of the Union's duty of fair rep-

resentation in negotiating a collective bargaining agreement

may arguably not be subject to an exhaustion requirement

(see Beriault v. Local 40, Super Cargoes & Checkers, 501

F.2d 258 (9th Cir. 1974)), Respondents’ claims here that

Gold Kist breached the agreement were clearly subject to

the contractual grievance and arbitration provisions. Re-

spondents were therefore required to exhaust their contrac-

tual remedies before bringing this action. Because there is

no possible breach of the agreement by Gold Kist that is

excused from the exhaustion requirement, this hybrid Sec-

tion 301/duty of fair representation claim cannot be main-

tained even if a separate claim based solely on the Union's

breach of the duty of fair representation arising from the

negotiation of the side agreement were viable.

27

The 1998 agreement contains a grievance and arbitration

procedure that requires exhaustion of the employees’ rights

under the contract prior to commencement of a suit in fed-

eral court. (App. at 94a-96a.) See Republic Steel Corp. v.

Maddox, 379 U.S. 650 (1965) (federal labor policy requires

employees to use contract grievance procedure for redress);

Hayes v. Reynolds Metals Co., 769 F.2d 1520, 1522 (11th

Cir. 1985) (same); Samples v. Ryder Truck Lines, Inc., 755

F.2d 881, 885-86 (11th Cir. 1985) (same). The grievance

and arbitration procedure was in full effect at all times rele-

vant to Respondents’ claims and was clearly available to

resolve any claim that Gold Kist violated the collective

bargaining agreement by paying employees more than the

contractual wage rates, by modifying the contract without a

written document, or by entering into an "individual agree-

ment” with an employee.’ As the district court recognized,

Respondents do not even allege that they have attempted to

utilize the grievance and arbitration procedure set forth in

the contract. (App. at 26a.)

* It should be noted that any such "individual agreement” would

also constitute an unfair labor practice under Section 8(a)(5) of the

NLRA. See Medo Photo Supply Corp. v. NLRB, 321 U.S. 678

(1944).

* It is likewise important to reiterate that the driver incentive plan

had been in effect over 20 years at the time the 1998 contract was

negotiated. There was nothing hidden or secretive about it.

Similarly, the 1998 contract was ratified by at least 11 of the

17 mill workers—several of whom are Respondents in this action.

Those Respondents knowingly ratified the 1998 contract, which

they knew contained no feed mill worker incentive plan (even

(continued...)

28

Respondents allege no facts to support any finding that

the failure to exhaust contractual remedies should be ex-

cused. More specifically, they do not allege any conduct by

Gold Kist that "amounts to a repudiation of those contrac-

tual procedures." Vaca v. Sipes, 386 U.S. 171, 185 (1967).

Neither can Respondents establish that the Union wrong-

fully refused to process a grievance based on an asserted

breach of the agreement by Gold Kist. /d. Finally, Respon-

dents cannot establish that the Union breached its duty of

fair representation in handling any grievance, because no

grievance was even attempted. /d. at 186; see also Hines v.

Anchor Motor Freight, Inc., 424 U.S. 554, 563-66 (1976).

Unlike in Hines, any alleged breach of the Union's duty

of fair representation in the present case was completely

unrelated to the availability or effectiveness of the contrac-

tual grievance and arbitration procedure. In Hines, employ-

ees who were discharged without just cause failed in their

grievance as a result of inadequate and incompetent

representation by their union representative. Jd. at 558. The

Court found that in such circumstances, the exhaustion re-

quirement could be excused and an action could be main-

tained against both the employer and the union. The Court

therefore concluded that an employer that had "played its

part in precipitating this dispute" by discharging the em-

> (...continued)

though such a provision had been sought during negotiations).

They thereafter failed to file any grievance over the longstanding

truck driver incentive plan, and then they filed the lawsuit that is

the basis for this proceeding. Those Respondents purposely

bypassed the contractual grievance and arbitration procedure so

they could attempt to gain through litigation what their union had

been unable to achieve through good-faith collective bargaining.

29

ployees in alleged violation of the agreement cculd not

insist on exhaustion of contractual grievance procedures in

the face of the union's failure to perform its representational

duties. /d. at 567-69. The Court has never held that exhaus-

tion should be excused where a union's alleged breach of its

duty of fair representation is unrelated to the presentation or

processing of a grievance.

In the present case, the only alleged breach of the Un-

ion's duty of fair representation is the negotiation of the

incentive plan on behalf of the drivers. There is no possible

conclusion that this alleged breach of the Union's duty in

any way prevented Respondents from challenging alleged

contract breaches by Gold Kist in a grievance. In any event,

Respondents did not even attempt to file a grievance prior to

filing this action.

As the district court found, based on undisputed facts,

Respondents are all aware of the contractual grievance pro-

cedure, yet none of them filed a grievance regarding any

alleged breach of contract prior to commencing this suit.

That this ground for seeking writ may be stated briefly

should not be read to diminish its importance as a matter of

federal labor policy. The NLRA provides that "[f]inal ad-

justment by a method agreed upon by the parties is declared

to be the desirable method for the settlement of grievance

disputes .. . ." 29 U.S.C. § 173(d). This statutory policy

"can be effectuated only if the means chosen by the parties

for settlement of their differences under a collective bar-

gaining agreement is given full play." United Steelworkers

v. American Mfg. Co., 363 U.S. 564, 566 (1960). To allow

an employee to maintain a Section 301 claim without first

exhausting the contractual grievance procedures "would de-

prive employer and union of the ability to establish a uni-

form and exclusive method for orderly settlement of em-

30

ployee grievances [and] ‘would inevitably exert a disruptive

influence upon both the negotiation and administration of

collective agreements." Republic Steel, 379 U.S. at 653

(quoting Local 174, IBT v. Lucas Flour Co., 369 U.S. 95,

103 (1962)).

Respondents’ claims were properly dismissed by the

district court for the reasons above.

CONCLUSION

For the foregoing reasons, Gold Kist respectfully re-

quests that the Court grant its petition for writ of certiorari.

Dated this the 10th day of July, 2000.

D. Christopher Lauderdale

HAYNSWORTH BALDWIN

JOHNSON & GREAVES LLC

P.O. Box 10888

Greenville, SC 29603

864.271.7410

Attorney for Petitioner Gold Kist Inc.